A Maltese start-up that attracted the interest of a Canadian medical producer for a $10 million deal for a letter of intent from Malta Enterprise, was rejected by the state investment arm.

Earlier last month, Canadian medical cannabis producer Maricann announced it was planning to acquire a Maltese start-up, Medican Holdings, for $10 million.

But the Maltese company was only formed in March 2018 and was then still not in possession of a letter of intent (LOI) from Malta Enterprise.

A government spokesperson this week told MaltaToday the project proposal submitted by the Medican had been rejected by the board of Malta Enterprise and that no LOI would be issued

Maricann’s stock exchange announcement said it had inked a non-binding agreement for Medican Holdings, which is primarily owned by Norwegian interests. The transaction is for $7.6m in shares and $2.35m in cash.

Maricann, which has facilities in Germany and Canada, said it plans to use Malta for its finished dose products. The transaction is subject to Medican obtaining regulatory approval. “If completed, the acquisition of Medican is expected to advance the company’s efforts in the import of raw materials and whole plant extracts from Canada to Malta for… manufacture into finished dose products using its proprietary VesiSorb drug delivery technology,” Maricann said in its announcement.

Medican is owned by Cosign Swift Holdings and Resulting Channel Holdings, both registered in Malta. Cosign is in turn owned by Norwegian firms Lommeboken AS and Okamo AS, while Resulting Channel is owned by the experienced finance entrepreneur Lars Christian Beitnes, who has founded several financial services companies and chairs various listed companies.

Malta Enterprise is currently issuing LOIs to medical cannabis companies, subject to over 20 conditions, but the LOIs are only valid once the law regulating medical cannabis manufacturing is enacted. The LOI can only be converted into an executable contract, through the signing of the lease agreement with Malta Industrial Parks, once the law is enacted.

Maricann CEO Ben Ward said in the company statement that his company was transitioning its pharmaceutical business to Europe, and saw Malta as having “key talent who are trained in finished dose manufacturing, and an existing base of pharmaceutical production that we will expect to engage as we move forward.”